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HomeMy Public PortalAboutBrewster 2015 Public Schools Audit TOWN OF BREWSTER, MASSACHUSETTS BREWSTER PUBLIC SCHOOLS INDEPENDENT ACCOUNTANTS ' REPORT ON APPLYING AGREED -UPON PROCEDURES YEAR ENDED JUNE 30 , 2015 TOWN OF BREWSTER , MASSACHUSETTS BREWSTER PUBLIC SCHOOLS JUNE 30 , 2015 CONTENTS PAGE Independent Accountants ' Report on Applying Agreed- Upon Procedures 1 Specific Compliance Requirements 2 - 6 Findings and Recommendations 7 - 9 R. E . BROWN & COMPANY CF RTB+II;D PUBLIC ACCOUNTANTS P.O. Box 230 - 25 CF114TERY STREET Mendon, Massachusetts 01756 Phone : (508) 478-3941 Fax (508) 4784779 INDEPENDENT ACCOUNTANTS ' REPORT ON APPLYING AGREED -UPON PROCEDURES To the Honorable Members of the School Committee And the Honorable Board of Selectmen Town of Brewster, Massachusetts We have performed the procedures enumerated in the attached appendix, which were agreed to by the management of the Town of Brewster, Massachusetts (the ' Town ') and the Brewster Public Schools, solely to assist you in evaluating the completeness and accuracy of the Town' s Massachusetts Department of Elementary and Secondary Education (the "Department ") En& of- Year Financial Report for the year ended June 30, 2015 , and to demonstrate the Town' s compliance with the requirements for preparing that report as specified by the Department. The Town of Brewster and the Brewster Public Schools' management is responsible for the En& of- Year Financial Report for the year ended June 30 , 2015 . This agreed- upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures described in the accompanying appendix that follows either for the purpose for which this report has been requested or for any other purpose . We were not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the completeness and accuracy of the En& of-- Year Financial Report filed with the Department. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the specified parties listed above and is not intended to be and should not be used by anyone other than those specified parties. / t Certified Public Accountants July 14 , 2016 SPECIFIC COMPLIANCE REQUIREMENTS Schedule 1 - Revenue & Expenditure Summary I. Revenues A. Revenue from Local Sources 1 . Trace Revenues from Local Sources reported on Schedule 1 to the municipal and district accounting ledgers . Also , trace the revenues reported on district' s accounting ledgers to revenues reported on Schedule 1 . These amounts should agree . C , D, and E. Revenues from Federal Grants, State Grants and Revolving & Special Funds 2 . Trace the revenue from state aid, federal grants , state grants, and revolving and special funds to the detail in District' s accounting ledgers . Also , trace the revenues reported on district' s accounting ledgers to revenues reported on Schedule 1 . These amounts should agree with the possible exception of revenue from state aid, federal grants and state grants, which are entered by the State based on allotments . Determine if the district verified the grant amounts received with the detail posted on the DESE website and pre -populated by DESE . Note : Amounts deposited in legally authorized revolving accounts (e . g. School Choice ) cannot be transferred to the General Fund. II. Expenditures A. By School Committee and B . By City or Town 3 . Trace the amounts reported for general fund education expenditures from Schedule 1 line 1850 to the municipal accounting ledgers and to the district accounting ledgers . Also trace the expenditures reported on district' s accounting ledgers to expenditures reported on Schedule 1 . These amounts should agree . If a "crosswalk " exists between the accounting ledgers and the EOYR, verify that the crosswalk agrees with the accounting ledgers in total and trace a sample of expenditures fivom the crosswalk to the accounting ledger . - 2 - SPECIFIC COMPLIANCE REQUIREMENTS 4 . Trace the amounts reported for a sample of ESE functions (i. e . teaching, principal), State Objects (i. e . professional salaries (01 ) , other salaries (02), and other expenditures (04 - 06) and ESE programs (i. e . regular day, SPED, etc . ) in Schedule 1 to the detail in the accounting ledgers or to the crosswalk, if applicable . These amounts should agree . 5 . Test Extraordinary Maintenance expenditures for the following (4300) : Verify that expenditures do not include salaries . Verify that the expenditures include applicable principal portions of a loan or the cost of a lease/purchase agreement. Verify that expenditures, classified as Extraordinary Maintenance (4300) do not exceed the per project dollar limit for extraordinary maintenance ($ 150 , 000) . Trace the expenditures to the detail in the accounting ledgers . 6 . Determine how expenditures for fringe benefits are assigned or allocated to Schedule 1 Employee Benefits " Insurance (5100 , 5200) . Trace the reported cost to the detail in the accounting ledgers using the methodology indicated . These amounts should agree . Determine if the district reported Insurance for Retired Employees (5260) separately and appropriately. 7 . Verify that expenditures charged to Line(s) 1683 and 2060 - Short- term Interest (5400) relate exclusively to Revenue Anticipation Notes (RAN ' s) . 8 . Verify that expenditures charged to Line 1684 and 2065 - Short- term Interest - BAN ' s (5450) relate exclusively to Bond Anticipation Notes (BAN ' s) • 9 . Identify expenditures reported as long- term School Construction debt for principal ( 8100) and interest ( 8200) . Verify that bond anticipation notes are not included in these functions . Trace the reported costs to the Treasurer' s debt schedule . Trace the reported amount to the detail in the accounting ledgers . These amounts should agree . NOTE : If the district received a lump sum wait list or progress payment from the Mass . School Building Authority, verify that the revenue was reported on line 130 and that expenses were reported for paydown of principal (8100) , or Purchase of Land and Buildings (7100 ,7200) if applicable . - 3 - SPECIFIC COMPLIANCE REQUIREMENTS 10 . Trace the expenditures for tuition payments : to other school districts in state (9100), to out of state schools (9200) , to non- public schools (9300), to member collaboratives (9400 ), and assessments to member regional school districts (9500 ) to the detail in the accounting ledgers . These amounts should agree . NOTE: If the district prepaid FYI 6 Special Education Tuition, verify prepaid tuition was not included as an FYI 5 expense . If the district prepaid FYI 5 tuition from FYI 4 , that amount should be included as an FYI 5 expense . 11 . For municipal expenditures that result in services directly related to the school committee : a . Obtain a copy of a written agreement between the School Committee and Municipal officials documenting agreed upon methodologies to be used when allocating, distributing or assigning Municipal expenditures to the District. b . Test the amounts reported using the documented methodology. These amounts should agree . 12 . Expenditures fi4om Federal Grants, State Grants and Special Funds a . Determine amounts reported in Column 1 by expenditure classification agree with filed Final Grant Expenditure reports for SFSF and Ed Jobs grants . b . Trace amounts claimed as Circuit Breaker expenses on line 3080 Column 5 to the Accounting ledgers or journals . Schedule 3 13 , For Schedule 3 expenditures : a . Trace the amounts reported by school location on the linked file to the accounting ledgers . These amounts should agree . b . If staff, is assigned to more than one school, determine if the District maintains a payroll system or spreadsheet to document the assignment of staff salaries by school location. c . If allocations are used to assign staff salaries to schools, programs, functions or objects, was the allocation supported by a documented methodology? I - 4 - SPECIFIC COMPLIANCE REQUIREMENTS d . If allocations are used for non- salary expenditures, determine if the District maintains a documented methodology for consistency in application. Allocations are acceptable on Schedule 3 for non- salary expenditures although direct assignment or charging is preferable . Schedule 4 14 . Ascertain the methodology used to allocate, distribute or assign SPED costs to the placement on Schedule 4 and review the propriety of the methodology. Test the amounts reported on Schedule 4 using this methodology. These amounts should agree . Schedule 7 15 . Trace the transportation expenditures reported on Schedule 7 to the transportation expenditures reported on Schedule 1 . These amounts should agree . Determine the methodology used to allocate transportation expenditures on Schedule 7 and verify the accuracy of the allocations . Also if applicable, verify that reimbursable expenditures have been reduced by transportation revenue received from students transported . 16 . Trace the pupils reported on Schedule 7 to the detailed transportation records and verify that the amounts reported on Schedule 7 are accurate and consistent with the detailed records . 17 . Determine if the district' s accounting system separates costs in order to facilitate reporting as outlined in Schedule 7 (In or Out of District, Pre- School, Non- Public, School Choice & Charter School) . Determine if reimbursable expenditures claimed on Line 4283 (Homeless from Outside the District) and Line 4285 (Homeless to Outside the District) are supported by adequate documentation. If a cost allocation plan was used to determine reimbursable expenditures, review the propriety of the plan and test the expenditures reported . Schedule 19 9i a 18 . Determine if the School District has reported all changes to Schedule 19 Part A . 1 - Appropriation by School Committee to the ESE . Compare the final School Committee Appropriation to Schedule 19 Part A. 1 as filed/amended to determine if all changes were reported . - 5 - SPECIFIC COMPLIANCE REQUIREMENTS 19 . Determine amounts budgeted in Schedule 19 Part A. 2 are consistent with methodologies outlined in the agreement noted in procedure II A . 4a . above . 20 . Determine that retiree health insurance (5250) is reported separately. - 6 - FINDINGS AND RECOMMENDATIONS 1 . Finding: Schedule 1 — requirement 2 — In our review of Schedule 1 Revenue for State Aid, Federal Grants, State Grants, and Revolving and Special Funds as compared to the detail in the School Department' s accounting ledgers, we noted that the Revenue reported on line 630 Tuition Receipts- School Choice column 2 (Special Education) in the amount of $ 55 , 157 was reported on the wrong line . This amount should have been reported on line 640 Tuition Receipts- Other column 2 (Special Education) . Thus line 630 column 2 (Special Education) should have been $ 0 , and line 640 column 2 (Special Education) should have been $ 55 , 157 . Criteria: • All revenues from State Aid , Federal Grants, State Grants, and Revolving and Special Funds received for the benefit of the School Department should be reported on the proper lines and columns in the Revenue section of the End of Year Financial Report. Recommendation : • We recommend that the Brewster School Department report all State Aid, Federal Grants, State Grants, and Revolving and Special Funds revenue as recorded in the School Department' s accounting ledgers on the proper lines and columns in the Revenue section of the End of Year Financial Report, Response: We agree with the finding and will be careful in the future. - 7 - FINDINGS AND RECOMMENDATIONS 2 . Finding: Schedule 1 — requirement 3 — In our review of the crosswalk between Schedule 1 School Committee total expenditures (line 1850) to the detail in the School Department' s and the Municipality s accounting ledgers, we noted that the amount reported as Purchase of Lands and Buildings (7100 & 7200) line 2100 column 5 (Undistributed) was overstated by $ 3 , 256 , 753 . The total amount on line 2100 column 5 should have been $ 0 not $ 3 ,256 , 753 as reported . This construction project will be funded 100 % by bonds . Criteria. • The amount reported as Purchase of Lands and Buildings (7100 & 7200 ) should only include MSBA progress payments or expenditures paid for by local appropriations . Recontntendation : • We recommend that the Municipality report only the expenditures that are o $set by MSBA Progress payments or expenditures paid for by local appropriations . Response: On future reports, the Town will report the Principal & Interest on Bonds for this completed project. - 8 - FINDINGS AND RECOMMENDATIONS 3. Finding: Schedule 1 — requirement 8 — In our review of the Municipal expenditures for Short Term Interest BANS on line 2065 column 5 (Undistributed ) we noted that the amount reported as BAN Interest for $ 0 was reported in error. The Town of Brewster paid BAN Interest in the amount of $ 9, 286 for the fiscal year 2015 . Thus line 2065 Column 5 (Undistributed ) should have been $ 9 , 286 , not $ 0 as reported . Criteria: The amount to be reported for Short Term Interest BANS should agree to the amount as recorded in the Municipality' s accounting ledger. Reconznrendationr We recommend that the Municipality report all Short Term Interest BANS as recorded in the Municipality' s accounting ledger on Schedule 1 . Response: The Town will report all Short Terni Interest on BANS on Schedule 1. - 9 -